For the average consumer, most major commercial transactions, such as buying a house, an automobile, a business, and the like, require financing or a monetary loan of some kind in order to pay for the transaction. There are many kinds of monetary loans available depending on the type of transaction contemplated, including personal loans, home mortgages, business lines of credit, and so forth. Similarly, there are many variables or negotiable terms associated with each monetary loan, such as interest rates, loan periods, payment options, and the like. Other important factors to consider include the type of lending institution (e.g., bank, credit union, etc.), the potential seller (e.g., national chain, local dealer, etc.), and an insurer if needed.
An example of a procedure 100 for conducting a transaction involving a monetary loan is illustrated in FIG. 1. The specific example of FIG. 1 is an automobile purchase, but the procedure 100 may be applied to other types of commercial transactions as well. A consumer or borrower 102 begins the procedure 100 by calling his/her lending institution (e.g., bank, credit union, etc.) 104 to apply for a monetary loan. After checking the borrower's personal information and credit history, a representative of the lending institution 104 informs the borrower 102 of the loan amount, period, and interest rate that he/she is eligible for. If the borrower 102 agrees to the terms of the loan, the lender representative delivers (e.g., by express mail, courier service, etc.) a “sight draft” 106 to the borrower 102. The “sight draft” 106, when executed, grants to the lending institution 104 a security interest in the purchased automobile as collateral for the monetary loan.
With the “sight draft” 106 in hand, the borrower 102 may proceed to an appropriate automobile dealership 108 and purchase his/her automobile of choice. For the automobile dealership 108, the “sight draft” 106 essentially serves as a check or cash payment from the lending institution 104. The dealership 108 simply fills in the pertinent information on the “sight draft” 106, including the dealership's name, the automobile's vehicle identification number (VIN), and the purchase price, and the borrower 102 signs the “sight draft” 106 to complete the transaction. Sometimes, the automobile dealership 108 may require the borrower 102 to provide proof of automobile insurance coverage to complete the transaction. In that case, the borrower 102 may need to contact his/her insurer 110 in order to obtain the proof of insurance coverage.
As can be seen from the foregoing, existing procedures for conducting a transaction involving financing or a monetary loan have a number drawbacks and limitations. For one thing, the lending institution 104 must employ a staff of representatives to receive telephone calls and/or personal visits from the borrower 102 and other consumers. These lender representatives are typically available only during normal business hours (e.g., 9 AM-5 PM), which may not be suitable or convenient for the borrower 102. In addition, because the “sight draft” 106 must be physically delivered to the borrower 102, there is usually a time delay of up to a day or more from the moment the borrower 102 is approved for the monetary loan. Furthermore, some states and/or automobile dealerships do not accept or recognize the legality or validity of the “sight draft” 106. All of this results in a procedure that is often complicated, time-consuming, and inconvenient for the average consumer.
Accordingly, what is needed is a way to conduct a commercial transaction requiring a monetary loan that overcomes the drawbacks and limitations of the existing procedures. In particular, what is needed is a way to conduct such a transaction where one or more aspects of the transaction, including obtaining of the monetary loan, may be performed online.